WASHINGTON, Jan 30 (Reuters) – Former Brazil President Jair Bolsonaro has applied for a six-month tourist visa to remain in the United States, his lawyer said on Monday, despite calls for any U.S. visas held by Bolsonaro to be revoked following violent protests in Brasilia.
The United States received his application on Friday, his lawyer, Felipe Alexandre, said, adding that Bolsonaro will remain in the United States while his application is pending.
“He would like to take some time off, clear his head, and enjoy being a tourist in the United States for a few months before deciding what his next step will be,” Alexandre said in an email response to Reuters.
“Whether or not he will use the full six months will be up to him and whatever strategy we agree to embark on based on his plans as they develop,” Alexandre added.
The Financial Times first reported that Bolsonaro had requested a tourist visa.
A State Department spokesperson said visa records are confidential under U.S. law, adding that the department cannot discuss details of individual visa cases.
[1/2] Brazil’s President Jair Bolsonaro looks on after a ceremony about the National Policy for Education at the Planalto Palace in Brasilia, Brazil June 20, 2022. REUTERS/Ueslei Marcelino
Far-right Bolsonaro flew to Florida two days before his term ended on Jan. 1 and leftist President Luiz Inacio Lula da Silva took office, before the former president’s supporters stormed the country’s capital.
Supporters of Bolsonaro ransacked Brazil’s Congress, Supreme Court and presidential palace, calling for a military coup to overturn the October election that Lula won.
Brazil’s Supreme Court has agreed to open an investigation into Bolsonaro for allegedly encouraging anti-democratic protests that ended in the storming of government buildings by his supporters in Brasilia.
Earlier this month, 41 Democratic members of the U.S. House of Representatives asked U.S. President Joe Biden’s administration on Thursday to cooperate with Brazil’s investigation into violent protests in Brasilia and revoke any U.S. visas held by Bolsonaro.
The State Department has said repeatedly its policy is not to discuss specific visa cases.
The State Department has said it was incumbent on an individual who entered the United States on a so-called “A” visa reserved for diplomats and heads of state to depart the country within 30 days or apply for a change of immigration status if they are no longer engaged in official business. Bolsonaro is believed to have entered on such a visa.
Reporting by Daphne Psaledakis; Editing by Aurora Ellis
Our Standards: The Thomson Reuters Trust Principles.
Pavel, Taiwan’s Tsai stress their shared values in call
China opposes other countries dealing with Taiwan
Beijing views Taiwan as renegade province
TAIPEI/PRAGUE, Jan 30 (Reuters) – Taiwan President Tsai Ing-wen held a telephone call with Czech President-elect Petr Pavel on Monday, a highly unusual move given the lack of formal ties between their countries and a diplomatic coup for Taipei that is sure to infuriate China.
The two leaders stressed their countries’ shared values of freedom, democracy and human rights during their 15-minute call, their offices said, and Pavel said he hoped to meet Tsai in the future.
Most countries avoid high-level public interactions with Taiwan and its president, not wishing to provoke China, the world’s second largest economy.
Beijing views Taiwan as being part of “one China” and demands other countries recognise its sovereignty claims, which Taiwan’s democratically-elected government rejects.
In 2016, U.S. President-elect Donald Trump spoke by telephone with Tsai shortly after winning the election, setting off a storm of protest from Beijing.
Tsai said she hoped that under Pavel’s leadership the Czech Republic would continue to cooperate with Taiwan to promote a close partnership, and that she hoped to stay in touch with him.
“Bilateral interaction between Taiwan and the Czech Republic is close and good,” her office summarised Tsai as having said.
Pavel, a former army chief and high NATO official who won the Czech presidential election on Saturday, said on Twitter that the two countries “share the values of freedom, democracy, and human rights”.
‘ONE-CHINA’ PRINCIPLE
Earlier, China’s foreign ministry had said it was “seeking verification with the Czech side” on media reports that the call was to take place.
“The Chinese side is opposed to countries with which it has diplomatic ties engaging in any form of official exchange with the Taiwan authorities. Czech President-elect Pavel during the election period openly said that the ‘one-China’ principle should be respected,” the ministry said.
Pavel will take office in early March, replacing President Milos Zeman, who is known for his pro-Beijing stance.
Zeman spoke with Chinese President Xi Jinping this month and they reaffirmed their “personal friendly” relationship, according to a readout of their call from Zeman’s office.
The Czech Republic, like most countries, has no official diplomatic ties with Taiwan, but the two sides have moved closer as Beijing ratchets up military threats against the island and Taipei seeks new friends in Eastern and Central Europe.
The centre-right Czech government has said it wants to deepen cooperation with democratic countries in the India-Pacific region, including Taiwan, and has also been seeking a “revision” of ties with China.
In 2020, the head of the Czech Senate visited Taiwan and declared himself to be Taiwanese in a speech at Taiwan’s parliament, channelling the late U.S. President John F. Kennedy’s defiance of communism in Berlin in 1963.
Reporting by Robert Muller and Jason Hovet; Additional reporting by Ben Blanchard and Yimou Lee in Taipei; editing by Gareth Jones
Our Standards: The Thomson Reuters Trust Principles.
Think-tank says delay in Western arms halted Ukraine’s advance
KYIV, Ukraine/WASHINGTON Jan 30 (Reuters) – The United States will not provide the F-16 fighter jets that Ukraine has sought in its fight against Russia, President Joe Biden said on Monday, as Russian forces claimed a series of incremental gains in the country’s east.
Ukraine planned to push for Western fourth-generation fighter jets such as the F-16 after securing supplies of main battle tanks last week, an adviser to Ukraine’s defence minister said on Friday. A Ukrainian air force spokesman said it would take its pilots about half a year to train on such fighter jets.
Asked if the United States would provide the jets, Biden told reporters at the White House, “No.”
The brief exchange came shortly after Ukrainian President Volodymyr Zelenskiy said that Russia had begun exacting its revenge for Ukraine’s resistance to its invasion with relentless attacks in the east.
Zelenskiy has warned for weeks that Moscow aims to step up its assault on Ukraine after about two months of virtual stalemate along the front line that stretches across the south and east.
Ukraine won a huge boost last week when Germany and the United States announced plans to provide heavy tanks, ending weeks of diplomatic deadlock on the issue.
“The next big hurdle will now be the fighter jets,” Yuriy Sak, who advises Defence Minister Oleksiy Reznikov, told Reuters on Friday.
While there was no sign of a broader new Russian offensive, the administrator of Russian-controlled parts of Ukraine’s eastern Donetsk province, Denis Pushilin, said Russian troops had secured a foothold in Vuhledar, a coal-mining town whose ruins have been a Ukrainian bastion since the outset of the war.
Pushilin said Ukrainian forces were continuing to throw reinforcements at Bakhmut, Maryinka and Vuhledar, three towns running from north to south just west of Donetsk city. The Russian state news agency TASS quoted him as saying Russian forces were making advances there, but “not clear-cut, that is, here there is a battle for literally every meter.”
Pushilin’s adviser, Yan Gagin, said fighters from Russian mercenary force Wagner had taken partial control of a supply road leading to Bakhmut, a city that has been Moscow’s main focus for months.
A day earlier, the head of Wagner said his fighters had secured Blahodatne, a village just north of Bakhmut.
Kyiv said it had repelled assaults on Blahodatne and Vuhledar, and Reuters could not independently verify the situations there. But the locations of the reported fighting indicated clear, though gradual, Russian gains.
Zelenskiy said Russian attacks in the east were relentless despite heavy casualties on the Russian side, casting the assaults as payback for Ukraine’s success in pushing Russian forces back from the capital, northeast and south earlier in the conflict.
[1/7] U.S. Air Force F-16 Fighting Falcon from the 140th Wing of the Colorado Air National Guard during NATO exercise Saber Strike flies over Amari military air base, Estonia June 12, 2018. REUTERS/Ints Kalnins
“I think that Russia really wants its big revenge. I think they have (already) started it,” Zelenskiy told reporters in the southern port city of Odesa.
Mykola Salamakha, a Ukrainian colonel and military analyst, told Ukrainian Radio NV that Moscow’s assault in Vuhledar was coming at huge cost.
“The town is on an upland and an extremely strong defensive hub has been created there,” he said. “This is a repetition of the situation in Bakhmut – one wave of Russian troops after another crushed by the Ukrainian armed forces.”
WESTERN DELAYS
The hundreds of modern tanks and armoured vehicles pledged to Ukraine by Western countries in recent weeks for a counteroffensive to recapture territory are months away from delivery.
This leaves Kyiv to fight through the winter in what both sides have described as a meat grinder of relentless attritional warfare.
Moscow’s Wagner mercenary force has sent thousands of convicts recruited from Russian prisons into battle around Bakhmut, buying time for Russia’s regular military to reconstitute units with hundreds of thousands of reservists.
Zelenskiy is urging the West to hasten delivery of its promised weapons so Ukraine can go on the offensive.
Kremlin spokesman Dmitry Peskov said Western countries supplying arms leads “to NATO countries more and more becoming directly involved in the conflict – but it doesn’t have the potential to change the course of events and will not do so.”
The U.S.-based Institute for the Study of War think-tank said “the West’s failure to provide the necessary materiel” last year was the main reason Kyiv’s advances had halted since November.
That allowed Russia to apply pressure at Bakhmut and fortify the front against a future Ukrainian counter-attack, its researchers said in a report, though they said Ukraine could still recapture territory once the promised weapons arrive.
Zelenskiy met Danish Prime Minister Mette Frederiksen on Monday in Mykolaiv, a rare visit by a foreign leader close to the front. The city, where Russia’s advance in the south was halted, had been under relentless bombardment until Ukraine pushed the front line back in November.
Russia’s invasion, which it launched on Feb. 24 last year claiming it was necessary to protect itself from its neighbour’s ties with the West, has killed tens of thousands of people and driven millions from their homes.
Additional reporting by Pavel Polityuk, Kevin Liffey, Ronald Popeski and Reuters bureaus; Writing by Peter Graff, Philippa Fletcher and Doina Chiacu; Editing by Gareth Jones, William Maclean and Cynthia Osterman
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WASHINGTON, Jan 29 (Reuters) – A top Republican in the U.S. Congress on Sunday said the odds of conflict with China over Taiwan “are very high,” after a U.S. general caused consternation with a memo that warned that the United States would fight China in the next two years.
In a memo dated Feb. 1 but released on Friday, General Mike Minihan, who heads the Air Mobility Command, wrote to the leadership of its roughly 110,000 members, saying, “My gut tells me we will fight in 2025.”
“I hope he is wrong. … I think he is right though,” Mike McCaul, the new chairman of the Foreign Affairs Committee in the U.S. House of Representatives, told Fox News Sunday.
The general’s views do not represent the Pentagon but show concern at the highest levels of the U.S. military over a possible attempt by China to exert control over Taiwan, which China claims as a wayward province.
Both the United States and Taiwan will hold presidential elections in 2024, potentially creating an opportunity for China to take military action, Minihan wrote.
McCaul said that if China failed to take control of Taiwan bloodlessly then “they are going to look at a military invasion in my judgment. We have to be prepared for this.”
He accused the Democratic administration of President Joe Biden of projecting weakness after the bungled pullout from Afghanistan that could make war with China more likely.
“The odds are very high that we could see a conflict with China and Taiwan and the Indo Pacific,” McCaul said.
The White House declined to comment on McCaul’s remarks.
DEMOCRAT DISAGREES
Representative Adam Smith, the top Democrat on the House Armed Services Committee, said he disagreed with Minihan’s assessment.
Smith told Fox News Sunday that war with China is “not only not inevitable, it is highly unlikely. We have a very dangerous situation in China. But I think generals need to be very cautious about saying we’re going to war, it’s inevitable.”
Smith said the United States needs to be in a position to deter China from military action against Taiwan, “but I’m fully confident we can avoid that conflict if we take the right approach.”
U.S. Defense Secretary Lloyd Austin earlier this month said he seriously doubted that ramped-up Chinese military activities near the Taiwan Strait were a sign of an imminent invasion of the island by Beijing.
A Pentagon official on Saturday said the general’s comments were “not representative of the department’s view on China.”
Reporting By Ross Colvin; Additional reporting by David Lawder; Editing by Nick Zieminski and Mark Porter
Our Standards: The Thomson Reuters Trust Principles.
WASHINGTON, Jan 28 (Reuters) – The U.S. Treasury Department’s top sanctions official on a trip to Turkey and the Middle East next week will warn countries and businesses that they could lose U.S. market access if they do business with entities subject to U.S. curbs as Washington cracks down on Russian attempts to evade sanctions imposed over its war in Ukraine.
Brian Nelson, undersecretary for terrorism and financial intelligence, will travel to Oman, the United Arab Emirates and Turkey from Jan. 29 to Feb. 3 and meet with government officials as well as businesses and financial institutions to reiterate that Washington will continue to aggressively enforce its sanctions, a Treasury spokesperson told Reuters.
“Individuals and institutions operating in permissive jurisdictions risk potentially losing access to U.S. markets on account of doing business with sanctioned entities or not conducting appropriate due diligence,” the spokesperson said.
While in the region, Nelson will discuss Treasury’s efforts to crack down on Russian efforts to evade sanctions and export controls imposed over its brutal war against Ukraine, Iran’s destabilizing activity in the region, illicit finance risks undermining economic growth, and foreign investment.
The trip marks the latest visit to Turkey by a senior Treasury official to discuss sanctions, following a string of warnings last year by Treasury and Commerce Department officials, as Washington ramped up pressure on Ankara to ensure enforcement of U.S. curbs on Russia.
STRAINED RELATIONS
Nelson’s trip coincides with a period of strained ties between the United States and Turkey as the two NATO allies disagree over a host of issues.
Most recently, Turkey’s refusal to green-light the NATO bids of Sweden and Finland has troubled Washington, while Ankara is frustrated that its request to buy F-16 fighter jets is increasingly linked to whether the two Nordic countries can join the alliance.
Nelson will visit Ankara, the Turkish capital, and financial hub Istanbul on Feb. 2-3. He will warn businesses and banks that they should avoid transactions related to potential dual-use technology transfers, which could ultimately be used by Russia’s military, the spokesperson said.
Dual-use items can have both commercial and military applications.
Washington and its allies have imposed several rounds of sanctions targeting Moscow since the invasion, which has killed and wounded thousands and reduced Ukrainian cities to rubble.
Turkey has condemned Russia’s invasion and sent armed drones to Ukraine. At the same time, it opposes Western sanctions on Russia and has close ties with both Moscow and Kyiv, its Black Sea neighbors.
It has also ramped up trade and tourism with Russia. Some Turkish firms have purchased or sought to buy Russian assets from Western partners pulling back due to the sanctions, while others maintain large assets in the country.
But Ankara has pledged that international sanctions will not be circumvented in Turkey.
Washington is also concerned about evasion of U.S. sanctions on Iran.
The United States last month imposed sanctions on prominent Turkish businessman Sitki Ayan and his network of firms, accusing him of acting as a facilitator for oil sales and money laundering on behalf of Iran’s Revolutionary Guard Corps.
While in the United Arab Emirates, Nelson will note the “poor sanctions compliance” in the country, the spokesperson said.
Washington has imposed a series of sanctions on United Arab Emirates-based companies over Iran-related sanctions evasion and on Thursday designated a UAE-based aviation firm over support to Russian mercenary company the Wagner Group, which is fighting in Ukraine.
(This story has been corrected to change headline to UAE, Turkey, not Middle East; adds Turkey in paragraph 1)
Reporting by Daphne Psaledakis and Humeyra Pamuk
Editing by Don Durfee and Leslie Adler
Our Standards: The Thomson Reuters Trust Principles.
WASHINGTON, Jan 27 (Reuters) – Tesla (TSLA.O) Chief Executive Elon Musk met two top White House officials on Friday in Washington to discuss how the car maker and Democratic President Joe Biden could work together to advance electric vehicle production and speed electrification of U.S. vehicle networks.
Musk met John Podesta, a Democratic stalwart who serves as Biden’s senior advisor for clean energy innovation, and Mitch Landrieu, who oversees infrastructure spending, a White House spokesperson told Reuters.
“John Podesta and Mitch Landrieu met with Elon Musk to discuss shared goals around electrification and how the Bipartisan Infrastructure Law and Inflation Reduction Act can advance electric vehicle production and charging as well as the broader cause of electrification,” the White House spokesperson said.
Musk responded on Twitter to a link to an earlier version of this story with “True.”
A Reuters witness on Friday saw Podesta, Landrieu and Musk entering a downtown building that houses both Tesla’s Washington lobbying operation and the Center for American Progress, a think tank Podesta founded. Landrieu and Podesta left about half an hour later and did not answer questions.
Musk left about 45 minutes after Podesta and Landrieu. He too ignored questions from a Reuters reporter.
BIDEN, MUSK TENSIONS
Relations have often seemed antagonistic between Biden, who has pushed for companies to use union labor, and Musk, who has pushed to keep unions out of his factories.
Musk called Biden “a damp sock puppet in human form” last year after Biden highlighted EV production by GM and Ford in a tweet but left out Tesla.
Biden only publicly acknowledged the role of Tesla in U.S. electric vehicle manufacturing over a year after taking office, after Musk repeatedly complained about being ignored.
In June, Biden compared Tesla unfavorably to Ford and sarcastically wished Musk “lots of luck” on his “trip to the moon” after the billionaire expressed reservations about the economy.
Still, Musk has long-standing important relationships with the U.S. government, and those have continued under the Biden administration.
Tesla has benefited from tax subsidies given to buyers of its electric vehicles while SpaceX, Musk’s rocket company, has contracts worth billions of dollars to deliver astronauts and cargo to and from the International Space Station, and to build a moon lander.
U.S. consumers who bought Teslas became eligible again this month for up to $7,500 in consumer tax credits, under the $430 billion U.S. Inflation Reduction Act (IRA) passed last August. An earlier tax credit for Tesla buyers expired after the automaker sold its first 200,000 vehicles in the United States.
The law imposes requirements that EVs receiving the tax credits must be North American-made. There are also caps on vehicle prices and income for buyers who are eligible for the credits.
The law also sets new battery sourcing restrictions expected to take effect in March. It also includes new U.S. battery production credits that Musk said earlier this week could have significant benefits to the company.
Reporting by Nandita Bose, David Shepardson and Raphael Satter; Editing by Heather Timmons, David Gregorio and Rosalba O’Brien
Our Standards: The Thomson Reuters Trust Principles.
Jan 25 (Reuters) – Donald Trump could learn soon whether he or any associates will be charged or cleared of wrongdoing in a Georgia probe into his efforts to overturn his 2020 election defeat, one of a series of legal threats looming over the Republican former U.S. president:
GEORGIA ELECTION TAMPERING PROBE
On Tuesday, the prosecutor in the state of Georgia spoke to a judge on behalf of a special grand jury empanelled in May to investigate Trump’s alleged efforts to influence that state’s 2020 election results.
Fani Willis, the Fulton County district attorney and a Democrat who will ultimately decide whether to pursue charges against Trump or anyone else, said the grand jury had completed its task and decisions were “imminent.”
The investigation focuses in part on a phone call Trump made to Georgia Secretary of State Brad Raffensperger, a Republican, on Jan. 2, 2021. Trump asked Raffensperger to “find” enough votes needed to overturn Trump’s election loss in Georgia.
Legal experts said Trump may have violated at least three Georgia criminal election laws: conspiracy to commit election fraud, criminal solicitation to commit election fraud and intentional interference with performance of election duties.
Trump could argue that his discussions were constitutionally protected free speech.
U.S. CAPITOL ATTACK
The U.S. Justice Department has investigations under way into both Trump’s actions in the 2020 election and his retention of highly classified documents after departing the White House in 2021.
Both investigations involving Trump are being overseen by Jack Smith, a war crimes prosecutor and political independent. Trump has accused the FBI, without evidence, of launching the probes as political retribution.
A special House of Representatives committee investigating the deadly Jan. 6, 2021, assault by Trump supporters on the U.S. Capitol urged the Justice Department to charge Trump with corruption of an official proceeding, conspiracy to defraud the United States, conspiracy to make a false statement and inciting or aiding an insurrection.
The request is non-binding. Only the Justice Department can decide whether to charge Trump, who has called the Democratic-led panel’s investigation a politically motivated sham.
MISSING GOVERNMENT RECORDS
U.S. Attorney General Merrick Garland appointed Smith to investigate whether Trump improperly retained classified records at his Florida estate after he left office in 2021 and then tried to obstruct a federal investigation.
Garland also appointed former U.S. Attorney Robert Hur for Maryland to investigate the removal of classified records in President Joe Biden’s possession dating to his time as vice president.
It is unlawful to willfully remove or retain classified material.
In Trump’s case, the FBI seized 11,000 documents from the former president’s Mar-a-Lago Florida estate in a court-approved Aug. 8 search. About 100 documents were marked classified; some were designated top secret, the highest level of classification.
Trump has accused the Justice Department of engaging in a partisan witch hunt.
NEW YORK ATTORNEY GENERAL CIVIL LAWSUIT
New York Attorney General Letitia James said in a civil lawsuit filed in September that her office uncovered more than 200 examples of misleading asset valuations by Trump and the Trump Organization business between 2011 and 2021.
Former U.S. President Donald Trump speaks during a rally in Commerce, Georgia, U.S. March 26, 2022. REUTERS/Alyssa Pointer/File Photo
A Democrat, James accused Trump of inflating his net worth by billions of dollars to obtain lower interest rates on loans and get better insurance coverage.
A New York judge ordered that an independent monitor be appointed to oversee the Trump Organization before the case goes to trial in October 2023.
James seeks to permanently bar Trump and his children Donald Jr., Eric and Ivanka Trump from running companies in New York state, and to prevent them and his company from buying new properties and taking out new loans in the state for five years.
James also wants the defendants to hand over about $250 million that she says was obtained through fraud.
Trump has called the attorney general’s lawsuit a witch hunt. A lawyer for Trump has called James’ claims meritless.
James said her probe also uncovered evidence of criminal wrongdoing, which she referred to federal prosecutors and the Internal Revenue Service for investigation.
DEFAMATION CASE
E. Jean Carroll, a former Elle magazine writer, has filed two lawsuits accusing Trump of having defamed her when he denied her allegation that he raped her in New York’s Bergdorf Goodman department store dressing room in late 1995 or early 1996.
Trump accuses her of lying to drum up sales for a book.
Carroll first sued Trump after he denied the accusation in June 2019 and told a reporter at the White House that he did not know Carroll, that “she’s not my type,” and that she concocted the claim to sell her new memoir.
The second lawsuit arose from an October 2022 social media post where Trump called the rape claim a “hoax,” “lie,” “con job” and “complete scam,” and said “this can only happen to ‘Trump’!”
That lawsuit includes a battery claim under the Adult Survivors Act, which starting last Nov. 24 gave adults a one-year window to sue their alleged attackers even if statutes of limitations have expired.
A U.S. judge on Jan. 13 rejected as “absurd” Trump’s effort to dismiss the second lawsuit.
Trump and Carroll are awaiting a decision from a Washington, D.C., appeals court on whether, under local law, Trump should be immune from Carroll’s first lawsuit over his June 2019 comments.
That lawsuit would likely be dismissed if the court decided that Trump spoke within his role as president, and continue if Trump spoke in his personal capacity as Carroll argues.
Any decision would have no effect on Carroll’s second defamation and battery lawsuit. A trial in the first lawsuit is scheduled for April 10.
NEW YORK CRIMINAL PROBE
Although Trump was not charged with wrongdoing, his real estate company was found guilty on Dec. 6 of tax fraud in New York state. A judge this month sentenced Trump’s namesake real estate company to pay a $1.6 million criminal penalty, the maximum the judge could impose.
Jurors convicted the Trump Organization, which operates hotels, golf courses and other real estate around the world, of paying personal expenses for top executives including former chief financial officer Allen Weisselberg, and issuing bonus checks to them as if they were independent contractors.
Weisselberg, the company’s former chief financial officer, pleaded guilty and was required to testify against the Trump Organization as part of his plea agreement. He is also a defendant in James’ civil lawsuit.
Reporting by Joseph Ax, Luc Cohen, Karen Freifeld, Sarah N. Lynch, Jonathan Stempel and Jacqueline Thomsen; Editing by Howard Goller
Our Standards: The Thomson Reuters Trust Principles.
Fourth-quarter GDP forecast to increase at a 2.6% rate
Strong consumer spending seen; other sectors to contribute
Weekly jobless claims expected to rise moderately
WASHINGTON, Jan 26 (Reuters) – The U.S. economy likely maintained a strong pace of growth in the fourth quarter as consumers boosted spending on goods, but momentum appears to have slowed considerably towards the end of the year, with higher interest rates eroding demand.
The Commerce Department’s advance fourth-quarter gross domestic product report on Thursday could mark the last quarter of solid growth before the lagged effects of the Federal Reserve’s fastest monetary policy tightening cycle since the 1980s kick in. Most economists expect a recession by the second half of the year, though mild compared to previous downturns.
Retail sales have weakened sharply over the last two months and manufacturing looks to have joined the housing market in recession. While the labor market remains strong, business sentiment continues to sour, which could eventually hurt hiring.
“This looks like it could be the last really positive, strong quarterly print we’ll see for a while,” said Sam Bullard, a senior economist at Wells Fargo Securities in Charlotte, North Carolina. “Markets and most people will look through this number. More recent data are suggesting that economic momentum is continuing to slow.”
According to a Reuters survey of economists, GDP growth likely increased at a 2.6% annualized rate last quarter after accelerating at a 3.2% pace in the third quarter. Estimates ranged from a 1.1% rate to a 3.7% pace.
Robust second-half growth would erase the 1.1% contraction in the first six months of the year.
Growth for the full year is expected to come in at around 2.1%, down from the 5.9% logged in 2021. The Fed last year raised its policy rate by 425 basis points from near zero to a 4.25%-4.50% range, the highest since late 2007.
Consumer spending, which accounts for more than two-thirds of U.S. economic activity, is expected to have grown at a pace faster than the 2.3% rate notched in the third quarter. That would mostly reflect a surge in goods spending at the start of the quarter.
Spending has been underpinned by labor market resilience as well as excess savings accumulated during the COVID-19 pandemic. But demand for long-lasting manufactured goods, which are mostly bought on credit, has fizzled and some households, especially lower income, have depleted their savings.
Economic growth also likely received a lift from business spending on equipment, intellectual property and nonresidential structures. But with demand for goods tanking, business spending also lost some luster as the fourth quarter ended.
Despite the clear signs of a weak handover to 2023, some economists are cautiously optimistic that the economy will skirt an outright recession, but rather suffer a rolling downturn, where sectors decline in turn rather than all at once.
ROLLING RECESSION
They argue that monetary policy now acts with a shorter lag than was previously the case because of advances in technology and the U.S. central bank’s transparency, which they said resulted in financial markets and the real economy acting in anticipation of rate hikes.
“We will continue to have positive GDP numbers,” said Sung Won Sohn, a finance and economics professor at Loyola Marymount University in Los Angeles. “The reason is sectors are taking turns going down, and not simultaneous declining. The rolling recession began with housing and now we are seeing the next phase which is consumption related.”
Indeed, with demand for goods slumping, factory production has declined sharply for two straight months. Job cuts in the technology industry were also seen as flagging cutbacks in capital spending by businesses.
While residential investment likely suffered its seventh straight quarterly decline, which would be the longest such streak since the collapse of the housing bubble triggered the Great Recession, there are signs the housing market could be stabilizing. Mortgage rates have been trending lower as the Fed slows the pace of its rate hikes.
Inventory accumulation was seen adding to GDP last quarter, but with demand slowing, businesses are likely to focus on reducing stock in their warehouse rather than placing new orders, which would undercut growth in the quarters ahead.
Trade, which accounted for the bulk of GDP growth in the third quarter, was seen either making a small contribution or subtracting from GDP growth. Strong growth is expected from government spending.
While the labor market thus far has shown remarkable resilience, economists argue that deteriorating business conditions will force companies to slow hiring and lay off workers.
Companies outside the technology industry as well as interest-rate sensitive sectors like housing and finance are hoarding workers after struggling to find labor during the pandemic.
A separate report from the Labor Department on Thursday is likely to show initial claims for state unemployment benefits rose to a seasonally adjusted 205,000 for the week ended Jan. 21, from 190,000 in the prior week, according to a Reuters survey of economists.
“We expect initial jobless claims will eventually start to turn back up after their recent drop, consistent with an eventual downturn in payrolls and a rise in the unemployment rate,” said Kevin Cummins, chief economist at NatWest Markets in Stamford, Connecticut. “In turn, we expect spending to slow as consumers will be less willing to run down savings in the face of a deteriorating labor market.”
Reporting by Lucia Mutikani; Editing by Andrea Ricci
Our Standards: The Thomson Reuters Trust Principles.
Jan 25 (Reuters) – Meta Platforms Inc (META.O) said Wednesday it will reinstate former U.S. President Donald Trump’s Facebook and Instagram accounts in the coming weeks, following a two-year suspension after the deadly Capitol Hill riot on January 6, 2021.
The restoration of his accounts could provide a boost to Trump, who announced in November he will make another run for the White House in 2024. He has 34 million followers on Facebook and 23 million on Instagram, platforms that are key vehicles for political outreach and fundraising.
His Twitter account was restored in November by new owner Elon Musk, though Trump has yet to post there.
Free speech advocates say it is appropriate for the public to have access to messaging from political candidates, but critics of Meta have accused the company of lax moderating policies.
Meta said in a blog post Wednesday it has “put new guardrails in place to deter repeat offenses.”
“In the event that Mr. Trump posts further violating content, the content will be removed and he will be suspended for between one month and two years, depending on the severity of the violation,” wrote Nick Clegg, Meta’s president of global affairs, in the blog post.
The decision, while widely expected, drew sharp rebukes from civil rights advocates. “Facebook has policies but they under-enforce them,” said Laura Murphy, an attorney who led a two-year long audit of Facebook concluding in 2020. “I worry about Facebook’s capacity to understand the real world harm that Trump poses: Facebook has been too slow to act.”
The Anti-Defamation League, the NAACP, Free Press and other groups also expressed concern Wednesday over Facebook’s ability to prevent any future attacks on the democratic process, with Trump still repeating his false claim that he won the 2020 presidential election.
Others said it was the right decision.
Jameel Jaffer, executive director at the Knight First Amendment Institute at Columbia University and a former ACLU official, defended the reinstatement. He had previously endorsed the company’s decision to suspend Trump’s account.
“The public has an interest in hearing directly from candidates for political office,” said Jaffer. “It’s better if the major social media platforms err on the side of leaving speech up, even if the speech is offensive or false, so that it can be addressed by other users and other institutions.”
OTHER REACTIVATIONS?
The decision to ban Trump was a polarizing one for Meta, the world’s biggest social media company, which prior to the Trump suspension had never blocked the account of a sitting head of state for violating its content rules.
The company indefinitely revoked Trump’s access to his Facebook and Instagram accounts after removing two of his posts during the Capitol Hill violence, including a video in which he reiterated his false claim of widespread voter fraud during the 2020 presidential election.
It then referred the case to its independent oversight board, which ruled that the suspension was justified but its indeterminate nature was not. In response, Meta said it would revisit the suspension two years after it began.
Meta’s blog post Wednesday suggested it may reactivate other suspended accounts, including those penalized for their involvement in civil unrest. The company said those reinstated accounts would be subject to more stringent review and penalties for violations.
Whether, and how, Trump will seize upon the opportunity to return to Facebook and Instagram is unclear.
Trump has not sent any new tweets since regaining his account on Twitter, saying he would prefer to stick with his own app Truth Social. But his campaign spokesman told Fox News Digital last week that being back on Facebook “will be an important tool for the 2024 campaign to reach voters.”
In a post on Truth Social, Trump responded to his reinstatement on Meta apps, saying: “Such a thing should never again happen to a sitting President, or anybody else who is not deserving of retribution!” He did not indicate if or when he would begin posting on Meta platforms again.
Representative Adam Schiff, a Democrat who previously chaired the House Intelligence Committee, criticized the decision to reinstate him.
“Trump incited an insurrection,” Schiff wrote on Twitter. “Giving him back access to a social media platform to spread his lies and demagoguery is dangerous.”
Reporting by Sheila Dang in Dallas and Katie Paul in Palo Alto; additional reporting by Greg Bensinger, David Shepardson, Kanishka Singh, Eva Mathews and Yuvraj Malik; Editing by Kenneth Li and Rosalba O’Brien
Our Standards: The Thomson Reuters Trust Principles.
WASHINGTON, Jan 24 (Reuters) – U.S. senators slammed Live Nation Entertainment’s lack of transparency and inability to block bot purchases of tickets on Tuesday, in a hearing called after a major fiasco involving ticket sales for Taylor Swift’s upcoming concert tour.
Live Nation Entertainment Inc (LYV.N) subsidiary Ticketmaster, which has been unpopular with fans for years, has drawn fresh heat from U.S. lawmakers over how it handled ticket sales last fall for Swift’s “Eras” tour, her first in five years. Experts say Ticketmaster commands more than 70% market share of primary ticket services for major U.S. concert venues.
“We apologize to the fans, we apologize to Ms. Swift, we need to do better and we will do better,” Joe Berchtold, who is president and chief financial officer of Live Nation, told the U.S. Senate Judiciary Committee hearing on Tuesday.
“In hindsight there are several things we could have done better – including staggering the sales over a longer period of time and doing a better job setting fan expectations for getting tickets,” Berchtold said.
Republican Senator Mike Lee said in an opening statement that the Ticketmaster debacle highlighted the importance of considering whether “new legislation or perhaps just better enforcement of existing laws might be needed to protect the American people.”
LACK OF COMPETITION
Senators slammed Berchtold for Live Nation’s fee structure and inability to deal with bots which bulk buy tickets and resell them at inflated prices.
“There isn’t transparency when no one knows who sets the fees,” Democratic Senator Amy Klobuchar said, responding to Berchtold’s claim that Live Nation fees fluctuate based on “ratings.”
Republican Senator Marsha Blackburn called Live Nation’s bot problem “unbelievable,” pointing out that much smaller companies are able to limit bad actors in their systems.
“You ought to be able to get some good advice from people and figure it out,” she said.
[1/2] Taylor Swift arrives at the 2022 MTV Video Music Awards at the Prudential Center in Newark, New Jersey, U.S., August 28, 2022. REUTERS/Eduardo Munoz
“I’m not against big per se, but I am against dumb,” Republican Senator John Kennedy said, referring to Live Nation’s dominance in the ticket sales market. “The way your company handled ticket sales for Ms. Swift was a debacle, and whoever in your company was in charge of that should be fired.
“If you care about the consumer, cut the price! Cut out the bots! Cut out the middle people and if you really care about the consumer, give the consumer a break!”
Jack Groetzinger, cofounder of ticket sales platform SeatGeek, testified that the process of buying tickets is “antiquated and ripe for innovation” and called for the breakup of Live Nation and Ticketmaster, which merged in 2010.
“As long as Live Nation remains both the dominant concert promoter and ticketer of major venues in the U.S., the industry will continue to lack competition and struggle,” he told lawmakers.
Ticketmaster has argued that the bots used by scalpers were behind the Taylor Swift debacle, and Berchtold asked for more help in fighting the bots that buy tickets for resale.
Other witnesses include Jerry Mickelson, president of JAM Productions, who has been among critics of Ticketmaster.
In November, Ticketmaster canceled a planned ticket sale to the general public for Swift’s tour after more than 3.5 billion requests from fans, bots and scalpers overwhelmed its website.
Senator Klobuchar, who heads the Judiciary Committee’s antitrust panel, has said the issues that cropped up in November were not new and potentially stemmed from consolidation in the ticketing industry.
In November, Ticketmaster denied any anticompetitive practices and noted it remained under a consent decree with the Justice Department following its 2010 merger with Live Nation, adding that there was no “evidence of systemic violations of the consent decree.”
A previous Ticketmaster dispute with the Justice Department culminated in a December 2019 settlement extending the consent agreement into 2025.
Reporting by Diane Bartz, Moira Warburton and David Shepardson; editing by Jonathan Oatis
Our Standards: The Thomson Reuters Trust Principles.
Diane Bartz
Thomson Reuters
Focused on U.S. antitrust as well as corporate regulation and legislation, with experience involving covering war in Bosnia, elections in Mexico and Nicaragua, as well as stories from Brazil, Chile, Cuba, El Salvador, Nigeria and Peru.